Income tax measure could save Colorado taxpayers $1.6B over five years
(The Center Square) – A measure to lower Colorado's income tax rate could save taxpayers $1.6 billion over the next five years, according to a new analysis.
Voters will decide in November on Initiative #31, which proposes reducing the income tax rate from 4.55% to 4.4%.
The analysis, by the Common Sense Institute, a free-enterprise think tank, estimated that if passed, the measure's most significant economic impact would come in fiscal year 2023, with the "dynamic impact of the tax savings" being 9,110 more jobs.
“At a time when Colorado families are facing inflation, the proponents of this measure are seeking ways to relieve the tax burden and keep Colorado affordable,” Chris Brown, CSI’s vice president of policy and research, said in a statement.
Individuals who make $75,000 annually would see their tax bills decrease by $112, according to CSI.
Initiative #31, which would apply retroactively to income earned in 2022, was submitted by Independence Institute President Jon Caldara, and state Sen. Jerry Sonnenberg, R-Sterling. It's estimated to lower state revenue by more than $573 million over the next two years, CSI noted.
“Now that pandemic-era business relief programs have been terminated, proponents of Initiative #31 suggest that a tax break for Colorado businesses could provide some of the advantages they require to stay afloat,” Brown said.
Colorado taxpayers opted to lower the state's income tax rate to the current 4.55% during the 2020 election.